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UNITED STEELWORKERS LOCAL 8586

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GERDAU AMERISTEEL
January 6, 2006
 
Dear xxxxx:
I'm writing to briefly address the continuing rumors we are hearing about a strike. The most persistent rumor is that the union plans to call a strike sometime this month. Earlier this week, it was rumored that the union would call a strike right after its unity council meeting next week n St. Paul.
If the union does call a strike, it is our sincere hope that you will exercise your right to continue to work, or come to work when you are scheduled to return to work. You of course have a right to go out on strike, but you also have a legal right to work during a strike. This right to work is protected by both federal and state law. If the union does call a strike and you have to make a choice, we hope you will choose to work. The decision to work or strike is yours to make. But in making that choice, I hope you will carefully consider how a strike would affect you personally.
Unlike a lockout situation, employees who go out on strike cannot draw unemployment. That's the law in Texas. Also keep in mind that a strike could jeopardize your health insurance coverage. That is, while you would have a right to keep your insurance in effect, you would be responsible for paying the full cost of the premium. And very importantly, it's only fair that I tell you that it is the company's intent to operate the mill. The company's right to operate during a strike includes the right to hire new employees on a permanent basis to replace employees who go out on strike in support of union bargaining demands. This is an important fact of which you should be aware and carefully consider in making a choice to work or strike.
I again want to thank you for your cooperation and hard work in helping us get the mil! hack up to speed. For those of you yet to be recalled, thank you for your patience. I look forward to your returning to work so we can work together for the continued success of our Beaumont operations.
Sincerely,
 
Greg Bott
VP & General Manager,    ;
Beaumont Mill P.O. Box 3869 • Beaumont, TX 77704 • (409) 768-1211 • Fax: (409) 768-1090

Letter: Gerdau Ameristeel mail out to every one on 11/30/05

Effective December 12, 2005, Gerdau Ameristeel will offically begin to recall employees at the Beaumont Mill. Due to current business conditions we will not be recalling everyone immediately, but will recall employees in stages to normalize operations as needed to meet customer's orders.

Our current business plan will support only two shifts in the Rolling Mill, Billet Yard, Shipping, and enough Maintenance employees to support a two-shift Rolling Mill operation. In addition, we need enough employees in the Scrap Yard to perform switching and a small crew in the Melt Shop to begin restoring operations there.

Employees who are scheduled to be recall will receive a phone call and / or a registered letter. The purpose of this letter is simply to keep all mill employees informed.

Please note that negotiations with the Union are ongoing and we cannot at this time advise you of the exact employment terms that be in effect when they start up on December 12 th .

Hopefully, these trems will be determined before the end of the day on December 9th . When terms of employment are finalized, When terms of employment are finalized, we will notify you as soon as possible.

Personally, I am pleased to make this announcement and get our team back to doing what we do best: making steel.

Sincerely,

Greg Bott

VP & General Manager

GERDAU AMERISTEEL
July 1, 2005
Dear WILEY:
I would like to share with you the attached letter from our chairman and CEO, Phillip Casey, to a coworker in response to the letter that was published in the Beaumont Enterprise.
Please take the time to read Phil's letter and carefully consider his comments. The rhetoric of your union negotiators continues to grow in frequency and volume, but their actions are few and far between. I am particularly disappointed in the constant misrepresentations of the facts that have appeared in the various media recently.
I would also like to remind you that you have the right to tell your union representatives if you disagree with their actions and decisions.
We look forward to getting an agreement and producing steel together again soon. Call me or Jim Paull if you have any questions.
Greg Bott
Gcrdau Ameristeel P.O. Box 3869 • Beaumont, Texas 77704 • (409) 769- 1003 • Fax: (409) 769-1007
                                   (attached letter)
June 24, 2005
Dear 
I recently read your letter in the Beaumont Enterprise. I appreciate the sincerity of your comments and your initiative to provide meaningful feedback. ! also recognize the difficult circumstances that the negotiations and work stoppage at the Beaumont facility have created for our employees, their families, and our customers.
The decision to cease operations until an agreement has been reached was one of the most serious decisions made during my tenure. It was made only after full consideration of the unacceptable rate of progress in current negotiations, the union's history of protracted discussions and numerous delays, and the impact on our employees and business as a whole.
We will continue to work to earn your trust by informing your union committee in writing and verbally, as we have all along, of our position and actions. We are dedicated to having a cooperative working relationship that allows us to stay competitive. The best way to start that process is by reaching a fair contract as soon as possible.
Let me make clear that this letter is not to bargain directly with you, or to go around your bargaining committee. Gerdau Amensteel will continue to bargain in good faith only with your representatives for a new and fair agreement. However, in view of your letter, I do believe it is appropriate to explain to you my positions and to refute the recent reports that I do not respect the professionalism and dedication of U.S. workers. Nothing could be further from the truth. I value the contributions and loyalty of each and every Gerdau Ameristeel employee. Your 27 years of company service have certainly earned you my respect. I also have the same admiration for every man and woman who puts on a hard hat and steel-toe boots to create a product that enriches our lives and the skyline of our communities. The steel industry has a proud heritage that often fails to receive the recognition it justly deserves. My primary goal is to ensure this steel legacy is preserved in an increasingly competitive and hostile global steel market.
The report of a single journalist is being used as a diversion to keep a misinterpretation of my comments at the forefront. The recent advertising campaign is a personal assault against me at a time when everyone's positive energy should be focused on returning to the negotiations table and reaching a fair agreement. I would ask that, instead of relying on these distortions, you research my track record for the
II years that I have been CEO of Gerdau Ameristeel
Judge my character by the integrity and fairness of my decisions on employee well-being and business issues, particularly during recent years of extremely difficult industry conditions. Compare Gerdau Ameristeel's record of employment growth, job security, employee engagement and competitive wages and benefits to the ravaged expectations of large employee segments in our domestic industry. I also stand by my performance record of prudent business judgments that have been necessary to avoid hollow promises and ensure the preservation of this organization. These facts and the opinions of the thousands of employees at our 72 other operations are more reliable than the published misrepresentations about me.
In Pittsburgh, I spoke about the urgent need to consolidate and transform the North American steel industry to remain competitive in the 21st century. We need to rebuild our technical and leadership resources and draw upon the American spirit to regain our competitive position in the global market. These were positive comments designed to challenge and stimulate the commitment of all stakeholders who are interested in the revitaltzation of our industry.
My comments about benefits were intended to convey the fact that corporations in other countries are not faced with the same escalating medical and pension costs as American companies. Foreign governments subsidize or publicly fund employee benefits in many countries. I do not promote the abolition of essential benefits but do ask that we assess what promises are realistically deliverable. Recent steel company bankruptcies, and those companies' abandoning their medical and pension promises, are clear signals of the ruthless reality of the global steel market.
Another comment you made in your letter is that our contract proposal is highly concessionary. The company's proposal is fair, offers salary increases or lump sum payments to every employee, provides sound health care benefits, and enhances job security. The proposal is designed to be a positive step forward for every Beaumont employee and the long-term future of the mill. There are some changes that the company seeks on vacation and daily overtime but these are far outweighed by more positive changes and investments in keeping the mill successful for the long term.
The delays in negotiations have been due to the unavailability of union representatives. We believe they are trying to coordinate contract bargaining across our network of operations. While the representatives wait for other contracts to expire so they can pursue an international agenda, Beaumont employees remain out of work. The representatives have met with the company for only seven days in the last 84 days. They now say they are unavailable until the week of July 18. Their delays and unwillingness to introduce any degree of flexibility are preventing progress toward a fair contract that serves the economic interests of the local Beaumont employees. Gerdau Ameristeel is ready to return to the negotiations when the local union representatives are prepared.
We recognize that change is difficult, but insistence on no change is a radical position that is not prudent in today's dynamic steel environment. Your point about the favorable financial results of 2004 is valid but that brief spike is now over. The rod market is under severe import pressure and the performance outlook for demand and pricing is extremely uncertain. If the Beaumont facility is to remain economically viable, it will require the urgent reinvestment of cash to update systems and equipment. Gerdau Ameristeel is prepared to make that capital commitment if a four-year labor agreement can be achieved.
If the leadership of Local 8586 is willing to acknowledge the reality of the rod market and seek reasonable compromises, there is no obstacle that cannot be overcome to achieve a fair agreement that meets the needs of employees and ensures the Beaumont mill's long-term operations.
Sincerely,
Phillip E. Casey        / Chairman and CEO /
Executive Offices 4221 'W. Bay scoot BouJevard, Suite 60S Tampa, Florida 33607 P.O. Box 31328 Tampa. Florida 33631-3528 * (813) 286-8383 • (800) 637-8144

GERDAU AMERISTEEL

May 26, 2005

Dear WILEY:

The purpose of this letter is to explain Gerdau Ameristeel's position on its offers. It is not our intention to bypass the Union as your representative. We will continue to deal with the Union as your exclusive representative.

After meeting for four months in 22 sessions, Gerdau Ameristeel's Last, Best and Final proposal was presented to your union negotiating committee on May 9, 2005. We regret that, despite our good-faith efforts, the union committee has left us no bargaining room on aspects of the agreement that are key to the long-term, successful operation of the mill. For that reason, the company has elected to exercise its right as provided by the National Labor Relations Act (NLRA) to cease operations at the Beaumont mill until such a time as a satisfactory agreement can be reached.

A major point of disagreement in the negotiations has been the term of the Agreement. The Union has insisted on an agreement that would expire on March 31, 2007. hi order to reduce the uncertainty and anxiety of the collective bargaining process and ensure long-term stability for the operations, the Company has urged the adoption of an agreement that would expire on March 31, 2009. After much discussion, the Company offered the Union two options:

Option A: An agreement with an expiration date of March 31, 2007, with no changes in the current wages and benefits; or

Option B: An agreement with an expiration date of March 31, 2009, which the Company prefers. Option B is needed for the Company to commit S25 million in proposed improvements at the Beaumont Mill.

Option B includes:Pay-All employees are protected against pay cuts. Everyone covered under Option B benefits financially. At the higher pay grades, which are below level when compared against independent, third-party research of the local market, most employees gain pay increases of 4.5% on average. For pay grades that are already above market, existing employees would be "grandfathered," during the term of the proposed agreement, at their current pay and receive a one-time, lump sum payment of $500. Our proposal increases base wages by over $460,000 in the first year and, over the four-year term of the contract, our offer would increase total wages by over $1.3 million.If the Option B proposal is accepted, Gerdau Ameristeel will also implement our Partners in Performance (PIP) incentive plan, which is currently available to all nonunion employees at the Beaumont mill. In the first two months in which eligible Beaumont employees have participated in the plan, the average bonus has been 18.12%. If Option B is ratified, union employees would be eligible for PIP earned on a weekly basis.

Benefits

The proposed health care benefits under Option B are more flexible than those provided under the expired contract. If accepted, many participants will be able to reduce the amount they spend on quality health coverage from Blue Cross Blue Shield. It offers different coverage options to allow all employees to select a plan that works best for them.

In an economy where steel can be produced overseas, shipped to the U.S., and still be sold for a price that is 20% less than our current selling prices, it is important that our labor agreement allows the company the flexibility and stability to manage our operations. Our goal is to have an agreement that allows the mill to produce high-quality products, be adaptable to the changing steel industry, and offer good wages and benefits to employees who contribute to the overall success of the mill. We believe Option B achieves these goals.

We urge each employee to evaluate the Company's proposals and determine if either is in your best interest. As you are aware, you have the right to express your opinion on these offers to your union negotiating committee. We will, of course, continue to deal with the union committee. While we prefer Option B, we are willing to reach agreement on either option. We want to get everyone back to work soon under an agreement that promotes your success and Gerdau Ameristeel's success.

Sincerely,

Greg Bott

Beaumont Mill P.O. Box 3869 • Beaumont, TX 77704 • (409) 768-1211 • Fax: (409) 768-1090

Gerdau Ameristeel

NOTICE

Despite our good-faith efforts over the last four months the union negotion committee has left us no bargaining room on aspects that are key long-term, successful opertion of Beaumont mill.

For this reason the has elected to exercise its right as provided by the National Labor Relations Act (NLRA)to cease operations until such time as a satisfactory agreement can be reached. We hope that this situation is short term and that you are able to returm to work soon.

For Employess Scheduled to Work until 7:00 p.m. on 05-26-05:

Those employees already at work at the effective time of lockout, who are required to leave prior to the end of their shift, will be paid for their full scheduled shift or 12 hours.

For Employess Reporting to Work for their 7:00 p.m. start time on 05-260-05:

Some of our employees may not have promptly notified by the union of this action. Employees who reported for scheduled work on-time at the front gate (7:00 p.m. CDT) on Thursday, May 26 will be paid until 7:30 p.m. CDT

In order to pay you correctly, please provide the security guard with the following information:

Last Name, First Name, Clock #, Shift Schedule, Supervisor.

We remain otimistic that you will be back at work soon.

Gerdau Ameristeel

Beaumont Mill

 

OLDER LETTERS FROM COMPANY

Philip K. Bell interview with The Beaumont Enterprise              04/17/05

Newly-merged union gets first test of strength

The new union emerging from a Las Vegas convention last week will have an opportunity to flex its muscle this week as contract negotiations between steel workers and Gerdau Ameristeel get under way in earnest. The new union, which will use the easy acronym of USW, combines the .United Steelworkers of America with the Paper, Allied-Industrial, Chemical and Energy workers union.That merger resulted in forming the largest industrial union in North America, with about 850,000 members. Oil contracts, which will expire next February, are expected to extend for another three years, assuring refiners and their union employees alike of more stability. Stability is what Gerdau also wants, said Philip K. Bell, Gerdau's director of human resources.

In an interview with The Beaumont Enterprise last week, Bell said Gerdau is seeking a four-year agreement with members of Local No. 8586, which represents about 265 members of the 350 employees at the mill on the east bank of the Neches River across from the Port of Beaumont. Gerdau Ameristeel acquired the former Cargill Inc. -owned North Star Steel mill and other mills around the country in November for $266 million.  Gerdau's North American head-quarters is in Tampa, Fla. "We're committed to steel in Beaumont," Bell said. "Our focus is on making steel profitable."

That's been an elusive goal for American steel makers for the past few years, and the Bush administration in 2003 reacted by slapping a tariff on low-priced steel imports that were flooding the market at the time. The tariffs ended in 2004, after helping the U.S. industry rebound, and the Commerce Department recently announced it would extend the Steel Import Monitoring and Analysis System that checks on the amount of imported steel hitting American docks. For Gerdau, a simple glance across the Neches could tell it a lot. One of Gerdau's main products is wire rod, which has a variety of uses — in construction and in consumer goods. Gerdau uses scrap steel to spin out rod from its mill in Beaumont and three others it acquired from Cargill.

At the Port of Beaumont's docks, longshoremen frequently unload ships filled with coiled wire rod as well. It's a reason the Commerce Department is continuing its monitoring program through March 2009 and will expand to all basic steel mill products to guard against unfair imports.  Steel made abroad often is not produced with environmental or worker protections available in the United States, which makes competition difficult.  In January 2004, the former North Star and members of Local No. 8586 reached agreement on a new contract that would be in effect for 15 months.  That pact expired March 31. The steelworkers had labored for two years before that contract under terms of an expired contract.  Bell said a company offer so far is to increase base wages by $1 million for its workforce during the course of a four-year contract with health coverage "comparable to what they have." He said many of the employees would get increases of $1 per hour. ; "We're trying to get a commitment to get skilled positions up to the market rate,"  he said.. Bell said Gerdau already intends to invest $25 million in capital improvements at the mill, plus improvements to the buildings and grounds.

"A major goal is fairness,"  Bell said, referring to the negotiation for a new contract. "It would give us the ability to operate in volatile markets."

April 7, 2005

Name Address

Dear ( ):

We want to continue with our recent communications efforts to keep you up to date on what's happening at our mill and the status of the ongoing labor negotiations. It is our intent to bargain in good faith with your union representatives to reach a contract.

Our company representatives have met with the union negotiating team over 15 times since January 18 and also with a federal mediator to discuss a new contract. We have agreed to roughly 70 aspects of the contract that are important to the overall negotiations process.

On Wednesday, in meetings with the union negotiating team, we presented our initial economic proposal. The union indicated they would take the proposal under advisement. Our next meetings are not scheduled until Tuesday, April 19, after key union representatives return from their convention in Las Vegas, Nevada, and again on April 29.

We believe that our initial economic proposal offers positive changes to the way we work together to keep our mill productive and competitive despite weak economic conditions in the wire rod market. Our initial offer is for a four-year term and covers the areas of wages and benefits, illustrating the importance and recognition that we place on each of our employees now and over the long term.

Let me briefly describe what was in the initial proposal:

Term

A four-year agreement has been proposed to ensure long-term stability for the operations at the mill and to reduce the uncertainty and anxiety of the collective bargaining process for our employees and their families.

Wages

No current Beaumont employee will have his or her hourly pay rate reduced. In fact, we are proposing to increase wages for many of the pay grades. To create a fair proposal, we evaluated independent, third-party research of the local market to benchmark our pay levels against other similar industries. What we learned was that the Beaumont mill is not in line with comparable positions in the region. To correct this, our proposal increases base wages by over $340,000 in the first year. In fact, over the four-year time period, our offer would increase wages by over $1 million.

In addition, we are proposing to consolidate the current 24 labor grades. We feel it is important for each employee to see substantive increases in pay between grades. Our proposal of nine (9) grades will ensure that each employee who increases his/her skills and knowledge and advances to the next grade will see a real economic benefit - averaging over $l/hour between labor grades versus the current system of just a few pennies.

Health Care

The health benefits program currently in place at the Beaumont facility and the services offered in the program are substantial. We are proposing very few changes to the existing program. If accepted, many plan participants will see a reduction in the amount they contribute for health insurance.

Our goal is simple, we want to operate a mill that produces the highest quality products, is able to adapt to the changing steel industry, and offers good wages and benefits to the employees who contribute to the overall success of our business. We are striving to build a spirit of cooperation so that we can achieve greatness and create opportunities for each party to share in the company's successes. We will continue to work with your union representatives to reach a new contract.

Gerdau Ameristeel's legacy demonstrates such success is possible. Our company is a steel company focused on identifying market opportunities in the steel industry and partnering with our employees to capitalize on those opportunities.

In conclusion, we hope that all of the points we are discussing can be resolved and a new contract negotiated. As previously mentioned, Gerdau Ameristeel has established a model for managing and operating steel mills that has proven successful. We have committed to work without a contract for a time and will continue negotiating in good faith with your union representatives once they return.

We will continue to keep you updated as new information becomes available. Thank you for your ongoing contribution to the success of Gerdau Ameristeel.

Yours truly,

Greg Bott

Vice President and General Manager

Straight Talk on Labor
     March 31. 2005                                                                                                           Issue One

Gerdau Ameristeel management is working diligently to achieve a contract that is good for our employees and customers and ensures the long-term success of the Company. We will continue to meet with the union's negotiating team.
We want to provide you with some preliminary questions and answers. Q.        What happens at midnight Thursday when the contract expires?
A.        The Union and the Company will continue working without a contract. On April 1, the same operational procedures, work rules, benefits and compensation will apply as they did today. In short, business will continue as usual. Paychecks will be issued on the same schedule, shifts report as scheduled and the mill will continue to operate on the normal schedule.
There are three exceptions to busiress as usual:
1.         The no-lock-out/no-strike provisions are cancelled so the union may strike at any time and the company can choose to initiate a lock out at anytime. However, we have reached an agreement that any lock out or strike will be preceded by a four (4) hour notification.
2.         Arbitration provisions are cancelled relating to any dispute that
arises after March 31 and before a new contract is executed. Note that any disputes currently in the arbitration process will continue the set course. Please be advised that we have proposed an arbitration clause in the new agreement as has the union.
3.         Check-off deduction will cease on the March 31 until a new contract is in place.
Q.        Why won't Gerdau Ameristeel accept the union's contract?
A.        Both Gerdau Ameristeel and the union continue to negotiate the agreement in good faith. The parties have submitted proposals that have been discussed extensively. As a result, a number of tentative agreements have been reached, proposals withdrawn or modified. In short, progress has been made as the parties continue to negotiate in good faith but there are a number of major issues to be resolved.
The parties have yet to discuss economics but, we're due to begin discussing the contract again today at 9:00 a.m.
(Jordan Ameristeel P.O. Box 3869 • Beaumont, Texas 77704 • (409) 769   1003 • Fax: (409) 769-1007

Straight Talk on Labor
March 31.2005 Issue One
Q.        Why is the company trying to take away our seniority and overtime calculation?
A.        We are not. We are proposing to change some aspects of these areas but no final agreements have been reached. However, we've made tentative agreements on more than 70 paragraphs of the contract. The rules of the National Labor Relations board prohibit us from negotiating with you directly but we will continue to bargain in good faith with the union as your representatives.
We will continue to keep you updated on material issues as the negotiation process advances.
Gerdau Ameristeel  P.O. Box 3869 • Beaumont, Texas 77704 • (409) 769- 1003 • l-'ax: (409) 769-1007

Straight Talk on Labor
March 31. 2005                                                                      Issue Two

There have been a number of questions concerning the Company's proposal on Seniority. Here's the straight talk about that proposal.
Rumor: The Company is going to take away our seniority.
Fact: The parties have reached tentative agreement to use the current contract's language for seniority except the definition of seniority (consideration and recognition), temporary vacancies in the maintenance department and lines of progression. The Company has proposed to change the definition of seniority. Here's the Company's proposal which defines "Seniority":
7.1 Consideration. The Company and the Union recognize that promotional opportunity and job security should increase in proportion to the length of continuous service and in the administration of policies affecting promotional opportunity and job security, the intent will be that wherever practicable, consideration should be given to continuous service in such cases. In all cases of promotion, decreases in force and recall after layoffs the following factors shall be considered:
1) Ability to perform the work and physical fitness
2) Workplace conduct, safety and attendance
3) Plant continuous service (plant service)
Where factors (1) and (2) are relatively equal, plant service shall be the determining factor
Fact: Actually, except for paragraph (2) "workplace conduct, safety and attendance", most of the language in this proposal was submitted by the Union in its 173 page "BIR" model contract.
Fact: The Company is going to continue to work with the Union committee to work out our differences and achieve a satisfactory contract for everyone.